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Pension Debate: DB transfer values 'won't get much higher'

Pension Debate: DB transfer values 'won't get much higher'

Defined benefit (DB) transfer values will not get much higher according to a leading actuary. 

Reports have recently suggested large businesses are offering high DB transfer values in order to encourage people to transfer out of schemes and remove expensive pension liabilities from company balance sheets. Low gilt yields and interest rates also contribute to higher transfer values. 

A survey conducted by Royal London found that typical transfer values were now worth more than the average house price in the UK. 

However, Alan Smith an actuary at First Actuarial, told the Great Pension Transfer Debate conference he did not think values would increase much further.

'My view is that gilt yields and interest rates will start to drift up and with that you get a combination of interest rates drifting up mortality improvements levelling off I think we might look back in a few years time and say that was the peak,' he said.

'I can't imagine transfer values getting much higher.'

New Model Adviser® recently reported that advisers around Norwich have seen an increase in transfer business due to Aviva offering high transfer values to employees. 

The British Steel Pension Scheme also saw the number of transfers double last year as reports suggested it faced trouble in the future. 

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